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Is the Cloud Fact or Fiction? You Are Now Entering the CP Zone

17Sep 2012

Is the Cloud Fact or Fiction? You Are Now Entering the CP Zone

Where else besides a Channel Partners event can a roomful of people have an intense debate over whether the cloud is fact or fiction in the current channel? That’s what happened last week during the third installment of the invitation-only Channel Partners Zone at the Fall 2012 Channel Partners Conference & Expo.

The hour-long debate, designed as an anything-goes discussion with key movers and shakers in the channel, sought to pin down the cloud’s role in today’s channel environment.

Kicking off the conversation, Bremmer said the biggest problem is getting cloud companies to differentiate themselves. He also said the industry has moved to “cloud” as the next big thing because margin has disappeared from access services. Trouble is, just as with access, in a year, cloud will be commoditized, he said.

“It already is!” someone called from the audience.

But, for Fields, that isn’t the case. For her company, cloud is real and profitable. “I sell cloud every single day,” she said. “My cloud is hosted IP, virtual desktop, colocation. I’m selling the cloud.”

“You’re the only one,” Walsh interjected. Cloud represents a mere 3 percent of the market, he said.

“I’ll take 3 percent of the market any day of the week,” Fields retorted.

The key here is that less than 10 percent of partners’ gross income comes from cloud products, Walsh said. “We are racing toward the bottom of something that doesn’t exist,” he said. The cloud really is about “effecting an outcome, not selling a product.”

In other words, customers want their businesses to run better, he explained; they don’t care what techie name is applied to that result. “Define what ‘add value’ means,” Walsh said. “The entire channel is racing toward a wall. Even if you’re adding value…the channel is going to hit a wall because it’s still steeped in its legacy, it keeps carrying the legacy business forward … and the customer wants their business to run better.”

Avoiding the wall will require intense education, several panelists and audience members noted. The tricky part is, at the same time, customers are demanding the latest and greatest technologies. “Right now we have to sell something — they want cloud,” said Wired Networks’ Jeremy Kerth from the audience.

From there, the debate turned into one of whether the channel will survive.

“Forrester [Research] says 14 percent of the channel is going to die because of cloud, Gartner says 40 percent, my company says 60 percent,” Walsh said. “I think you’re going to be reduced down to an arbitrage labor pool with low value.”

That assertion got people up in arms.

“I think I’m going to cry,” said Fields.

“That’s all commodity crap,” Radizeski said.

From the audience, Polycom’s Angela Trillhaase said, “So [partners] are not dying because of cloud, they’re dying because they can’t raise the level of conversation.”

To that, Bremmer noted, “There’s a lot of profit” in being a trusted adviser.

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